Super funds falling back on data analytics

Superannuation funds are hamstrung by deficient operating models that are not designed to capture and leverage data despite a desire to become customer-centric, MetLife research showed.

The survey, titled ‘Big data and super', pointed out that funds normally pushed for low transaction, low engagement relationships, with limited opportunities to collect new analytical information and observe member behaviour in depth.

Based on a survey of leaders from 10 of Australia's largest super funds, the paper highlighted the need for quality insurance from customers, pointing to the unexpected rise in claims for total and permanent disability insurance, which led to a 130 per cent rise in premiums.

This illustrated the need for funds to leverage data using more sophisticated methods, and said that while analytics teams were trying to make better use of existing information on members along with data from commissioned member research and external resources, capturing, and making use of data effectively remained a challenge.

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"We have never had the right framework in place to make data or evidence-based decisions," one fund executive said.

"I don't think anyone within Australia is using data particularly well."

The paper suggested insurance companies were well positioned to capture and analyse customer data and use it for segmented customer acquisition and retention methods.

Super funds were looking to the insurance data to drive strategic insights that would bring about better product design, performance management and risk controls.

Funds would like insurance data to explore customer behaviour and macro trends, speed up claims ratios, identify pricing and design problems, and collect data sets across portfolios.